From hay to oil to rare earths: feeding the evolving transport market

This is an update to my previous article about the challenges of meeting exponential demand for electric vehicles (EVs).

The global transport market’s hunger for EVs is voracious and growing. In 2017, 1million new electric cars were sold – 54% more than in 2016 – along with 100,000 electric buses and 30million electric scooters/bikes, mostly in China.

The International Energy Agency’s Global EV Outlook 2018 forecasts 4million EV sales in 2020, expanding to 21.5million by 2030. AlixPartners estimates investment of Euro255billion (AUD400b) in EVs between 2018 and 2022, with the launch of more than 200 new models, including more than 60 Chinese models.

Déjà vu: in 1900, only 4,192 internal combustion engine cars were sold in the U.S.; by 1912, it was 356,000. The lesson from history: investment in the supply chain for new technology is critical to a smooth transition.

A growth constraint on EVs that tends to steal the spotlight is the supply of lithium, cobalt, nickel and vanadium for batteries. Another critical constraint requiring urgent attention is the supply of rare earths for the permanent magnets used in EV traction motors, sensors and other parts, as my learned colleague has explained.

In 1900, the smart money was moving out of horse feed and into oil. In 2018, smart Chinese EV producers are moving their money to secure additional supply of rare earths and permanent magnets while prices remain low.

From the horse’s mouth to your ears: there’s a smart investment opportunity in central NSW right now. Alkane Resources’ Dubbo Project can supply 1,200 tonnes of rare earths annually, for 70+ years.

To progress the Dubbo Project to construction, Alkane Resources seeks a blend of financing from export credit agencies, strategic partners and equity and debt markets. Information for investors is available here.